European stock futures edge higher; U.K. GDP grows ahead of U.S. CPI release

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European stock futures edge higher; U.K. GDP grows ahead of U.S. CPI release
Credit: © Reuters.

Investing.com - European stock markets are expected to open higher Thursday after more dovish comments from Federal Reserve officials, as investors await the release of U.S. consumer inflation for monetary policy clues.

At 02:00 ET (06:00 GMT), the DAX futures contract in Germany traded 0.3% higher, CAC 40 futures in France climbed 0.6% and the FTSE 100 futures contract in the U.K. rose 0.5%. 

U.S. CPI release looms large

Confidence has been building as investors have started to get comfortable with the idea that the U.S. Federal Reserve is nearing the end of its interest rate increases.

The minutes from the Fed’s last meeting, released on Wednesday, indicated that most of the central bank’s policymakers agreed that one more rate hike would be "appropriate" as inflation continues to trend well above target.

However, comments in the weeks following September’s meeting suggest members are more wary about a further tightening of monetary policy following a sharp rise in Treasury yields.

U.S. Fed Governor Christopher Waller continued the theme on Wednesday, and he has been among the most vocal advocates for higher interest rates.

That said, September’s U.S. producer inflation figures came in much stronger than expected, creating a degree of tension ahead of the consumer price reading later in the session.

Analysts expect the headline number to rise 3.6% from last year and 0.3% for the month, while core CPI , which excludes food and fuel prices, is expected to rise 4.1% from last year and 0.3% from August.

U.K. economy grew in August

Back in Europe, U.K. gross domestic product rose 0.2% on the month in August, a substantial improvement from the surprise revised drop of 0.6% the prior month, but both industrial and manufacturing production still fell substantially on a monthly basis.

The Bank of England kept interest rates on hold at its meeting last month for the first time since it began its tightening cycle in December 2021, and policymakers will have to weigh still elevated inflation with a slowing economy when they next meet.

Publicis shines in third quarter

In corporate news, Publicis (EPA: PUBP ) increased its 2023 sales and margin forecasts as the French advertising giant beat expectations in the third quarter, defying a general slowdown in the ads industry.

On the flip side, Swiss fragrance and flavor maker Givaudan (SIX: GIVN ) disappointed with its third quarter sales, as they were weighed down by weaker volumes in its health care, savoury and dairy segments.

Crude falls on large U.S. stocks build

Oil prices fell Thursday after  indications of a hefty rise in U.S. crude stocks last week raised concerns about demand at the largest consumer in the world.

U.S. crude oil stockpiles swelled by just under 13 million barrels, according to data from the industry body American Petroleum Institute , which, if confirmed by the official numbers from the Energy Information Administration later in the session, would be the largest weekly crude stockpile build in eight months.

Gasoline inventories also rose by 3.6 million barrels, compared with the 800,000-barrel drop expected, fueling concerns that the end of the driving session in the U.S. has resulted in a sharp dropoff in demand.

The market is gradually handing back Monday’s 4% rally on the back of the worst outbreak in decades of fighting between Israel and Palestine militant group Hamas as the conflict seems largely contained between these two bodies.

By 02:00 ET, the U.S. crude futures traded 0.6% lower at $83.00 a barrel, while the Brent contract dropped 0.5% to $85.43 a barrel. 

Additionally, gold futures rose 0.2% to $1,891.65/oz, while EUR/USD traded 0.2% higher at 1.0634.

 

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